HUNDREDS of home owners and their dream builds are in limbo after Privium Homes suddenly downed tools on sites all over the Hunter Valley, as well as throughout Queensland and Victoria on Friday.
They stand to lose hundreds of thousands of dollars, with some at risk of becoming homeless as they wrestle to pay rent as well as mortgages, plus rates and fees attached to homes which only exist on paper, with fears the company is on the brink of collapse.
To rub salt into their wounds, Privium Pty Ltd paid shareholders a fully franked dividend of $22 million in 2019/20, while posting a loss of $28 million, according to the most recent documents lodged with corporate regulator, the Australian Securities and Investments Commission (ASIC).
Sub-contractors and suppliers may be some of the hardest hit, notwithstanding the appointment of FTI Consulting as voluntary administrators on Wednesday.
"The administrators are mindful Privium is contracted to build a large number of residential homes in various stages of construction," the administrators said in a statement. "People who have entered into contracts for these homes will have understandable concerns.
"The administrators will work closely with the applicable regulators ... to ensure individuals receive assistance and, if appropriate, have their properties completed by an alternative builder."
Another auditor's report reveals that Privium Homes Pty Ltd, whose sole director is Robert Harder, owed about $16 million to contractors and suppliers as at the end of June 2020. The report cites the flow-on effects of COVID as a significant factor in the company's dwindling financial position.
Mr Harder has been aware of Privium's financial distress for years. In a meeting with fellow members of Hillsong Church, recorded in June 2020, Mr Harder talks about the company's struggles in the lead up to COVID-19 shutdowns, saying his son Jared was having to let workers go and was unable to pay people.
"When COVID came along I said to my team, we actually understand tightening our belts because we have been doing that for two years now," he says.
"Going through this season of COVID and not knowing what's coming ... I was chatting to (Jared) about letting our staff go. We've got people there who don't actually have jobs now ... I can't even afford to pay my staff."
He goes on to talk about the 'tension' between his bank balance, and continuing to donate money to Hillsong's 'Heart for the House'.
Among the many Hunter Valley families affected are Sara Conlan and her partner Troy Farquharson who were so keen on the block of land they have purchased at Heritage Parc, Raymond Terrace, they spent the night sleeping in their car outside the estate office so they could be first in to purchase their preferred block.
Now all that exists is a concrete slab. Windows delivered to the site are rotting on the ground after tradies were told to down tools last week.
They were told in August that Privium Homes, also trading as Impact Homes, was not issuing new building contracts, but those with existing contracts would be ok.
At about the same time, another couple was told by the woman managing their build: "I may not have a job next week, I don't know where your build is up to and I can't help you."
The company has closed its office in Parry Street, Newcastle, which appears abandoned. Staff are not answering phone calls or emails, and the website is now password-protected.
Miss Conlan, a self-employed cleaner, said the one-year interest free period they have negotiated comes to an end in August 2022.
Their new home was to house Miss Conlan's son, with rooms for two grandchildren, and a room her father who has Multiple Sclerosis and is currently living alone. They were expecting to be able to move into their new home in February.
"It might take 18 months to sort all of this out," she said. "Well, we'll be homeless. We've worked so hard, that's what pisses me off."
The build on Nathan and Leesa Whyte-Southcombe's lot at Heritage Parc, Rutherford, has been abandoned at slab stage while others in the same estate are up to bricking stage. Work has stopped on all of them.
"I don't think Robert Harder realises the impact this is having on lives and marriages and all the rest of it," Mrs Whyte-Southcombe said. This morning our rates came in on the land, $800, and our strata fee bill, $400. That just tops it all off, doesn't it.
"We were supposed to have a frame and a roof by now, but we've got nothing. We are building a five-bedroom home so our children could have their own rooms. We do have an autistic son that needs his own room.
"We've worked our backsides off to build a home, to even get into the market, and we're just devastated now that we can't get answers and this company is allowed to sit behind closed doors and not answer our calls, not respond to emails, and not tell us what's going on. And not only us, lots of people."
Kiana Johnston, whose half-built home is located in the same estate at Rutherford, said she received a call on Friday November 5 from her site supervisor saying he'd been told to lock up all of his sites and down tools until further notice.
"Since then, I and many other people have had absolutely no information or communication from anyone at Privium in regards to what's happening," she said.
"I've paid my deposit for the build, for my slab and for my frames, my roof is on and my windows have been installed, but all my pallets of bricks are just sitting on-site, as well as timber ... All of my insulation has since blown out of my house and I will have to go to site and pick it up to save it from blowing away."
David Tiller, who is building in Cliftleigh, is in a similar boat. "Unfortunately we are in the middle of building with them," he said. "We are just in limbo. In my street there's at least ten of us building. It's a freaking nightmare."
Another couple, who say they have so far paid $172,000 and were two months away from completion, said a great many people, including friends of theirs, had 'lost deposits' and had lost hope they would ever see their money again.
Finding another builder will not answer everybody's woes, says Mitchell Clarke, who is mid-build in North Rothbury.
"My wife Kathryn and I have lost $14,000 in payments to Privium," he said. "A smaller home with a different builder will now cost $45,000 more to build than it did when we signed our Privium fixed-price contract. In other words, we are out $60,000 and have no house, and are unlikely to see a house for another 14 months."
Yet another couple, Rod and Karen Bathgate, were told in October that their block of land was on-hold for them at the asking price of $245,000. They have since been told their block will be auctioned off in February with an asking price of $400,000, an increase of more than $150,000 which Mrs Bathgate says they cannot afford.
The owners of Backyard Boyz, Sharon and Rob Dwyer, landscaping contractors who have done a lot of work for Privium, said this is the second time they've been stung by a building company in trouble.
"We are owed $13,000 by another group which was supposed to be paid yesterday," Mrs Dwyer said. "We have been hit by a $16,000 GST bill that we are not now going to be able to pay because the $10,000 we thought we were going to be paid by Privium is now not coming to us.
"Our concern is, if this continues, and 30 per cent more building companies go bust as is predicted, where does that leave us? Do we lose our house, our car, everything? We've got no legal ground to stand on. We can take it through the courts, which will cost us, but if they go bankrupt, how do you get blood out of a stone?"
Port Stephens MP Kate Washington, and many others including some of more than 800 members of a social media group dedicated to Privium Homes, called on the government to act.
The state government had failed to implement recommendations of an inquiry held in 2012, she said, which meant the long-identified risks remained.
"This is devastating for hundreds of families whose dreams have been ruined, and it's equally devastating for local tradies who haven't been paid for weeks and weeks," Ms Washington said.
Questions put to the Minister Kevin Anderson elicited a response from a NSW Department of Fair Trading spokesperson who said an inquiry was underway.
"The priority right now is to advise and provide support to consumers. Fair Trading encourages any consumer who has outstanding work or monies with Privium to lodge a complaint."
The administrators said they will provide a "high-level update" at a creditors meeting expected in late November.
Do you know more? Gabriel.Fowler@newcastleherald.com.au
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Newcastle Herald journalist (on and off since 2003). Gabriel.Fowler@newcastleherald.com.au
Newcastle Herald journalist (on and off since 2003). Gabriel.Fowler@newcastleherald.com.au
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